Mutual Fund Manager Educational Background and Activeness

20 Pages Posted: 15 Dec 2018

See all articles by Aron A. Gottesman

Aron A. Gottesman

Pace University - Lubin School of Business - Department of Finance and Economics

Matthew R. Morey

Pace University - Lubin School of Business - Department of Finance and Economics

Date Written: May 2, 2018

Abstract

Some active mutual funds are more active than others. Indeed, research has found that many so-called active funds are not nearly as active as they appear as they hold a portfolio that can be quite similar to their benchmark index. Furthermore it has generally been found that funds who are consistently active (hold a portfolio that is quite different from the benchmark) but take positions that are sufficiently well diversified across industries (do not have high tracking error), have better risk-adjusted performance. Given the importance of an active fund being truly active, in this paper we try to predict a fund’s activeness by examining mutual fund manager educational characteristics. After controlling for many factors including the firm at which the fund is located, we find that funds with managers who attend higher mean SAT undergraduate schools are significantly more active than other managers. We also find evidence that funds with younger managers and funds with managers who have a large ownership stake in the fund also are significantly more active.

Keywords: Active Share, Manager Education, Mutual Funds

JEL Classification: G23

Suggested Citation

Gottesman, Aron A. and Morey, Matthew R., Mutual Fund Manager Educational Background and Activeness (May 2, 2018). Pace University Finance Research Paper No. 2018/06, Available at SSRN: https://ssrn.com/abstract=3289632 or http://dx.doi.org/10.2139/ssrn.3289632

Aron A. Gottesman

Pace University - Lubin School of Business - Department of Finance and Economics ( email )

One Pace Plaza
New York, NY 10038
United States
212-346-1912 (Phone)
212-346-1573 (Fax)

Matthew R. Morey (Contact Author)

Pace University - Lubin School of Business - Department of Finance and Economics ( email )

One Pace Plaza
New York, NY 10038-1502
United States
212-618-6471 (Phone)

HOME PAGE: http://webpage.pace.edu/mmorey/

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